Will Gurgaon Realty See A Turn Of Luck In 2019?

When it came calling after eluding it for so long, the word affordable entered India’s real estate territory in a tsunami-like manner. As soon as it took charge in 2014, the National Democratic Alliance government made it clear that anything that came in the way of affordable housing was going to get hurt as it vowed to provide housing for all by 2022. Those property markets which were not able to quickly adapt had to bear the consequences, Gurgaon real estate included.

A change of heart…

Before affordability became the defining word for India’s real estate sector, property markets of the Millennium City, widely known for their expensive tag, were performing quite well. Everyone was fond of the vibe they got in this city, which successfully replicated some of the features of a global city. Those who swore by quality found the construction satisfying. Those who aspired to rub elbows with the well-off knew Gurgaon was the place to be. In that hot pursuit, buyers did not let money be a constraint even if they found Gurgaon more expensive than other markets in the region i.e. Noida and Ghaziabad. Easy availability of home finance, which banks began to offer aggressively stating this decade, only improved their odds. Consequently, the demand for housing went up while rates kept increasing. Gurgaon real estate’s joy ride, however, came to a shocking halt with the emergence of a slump-like situation in India’s other property markets the early signs of which were seen in 2014. In an atmosphere such as this, the term affordability attained a biblical sense; everything having any disagreement with the concept of affordability went right out of fashion.

Developers chucked their previous plans midway and quickly started a spree to launch affordable projects without having a universally accepted definition of the term. Banks started lending aggressively to this segment, proving ease of doing business. Buyers could not have asked for anything better.

It was only natural that the negativity attached to anything luxurious significantly affected the aspirational value based on which Gurgaon, streets of which are adorned by some of the posh malls and some of the grandest commercial set-ups in the country, was built. As if feeling guilty for wanting to buy luxury when opting for affordable would have been ideal, buyers turned their back to the Gurgaon property market.

Consistently since the demand has receded and supply has fallen even as property prices underwent some correction. Data available with PropTiger.com sow home sales in Gurgaon fell 43 per cent in the second quarter of the current financial while sales numbers increased 59 per cent for its affordable peer Noida on an annual basis. New launches also decreased 46 per cent during the period in Gurgaon while the fall in Noida has been restricted at 33 per cent, despite the fact that some of the biggest Noida-based builders are staring at insolvency and buyers’ trust in the market has hit an all-time low.

Property is way more affordable in Noida when compared to Gurgaon. A square foot of space in Gurgaon costs buyers an average Rs 5,000 while the same space in Noida could be bought for Rs 3,800, data available with PropTiger.com show.

It would be wrong to blame the high price alone if the developers’ saw their apple cart getting turned upside down in Gurgaon though. Buyers paid extra for enjoying world-class facilities in this city. They found themselves shortchanged when the city’s fancy infrastructure came undone on several occasions. Apparently, the city is not equipped well enough to handle even over-night rains as has been proved on various occasions. In a city that hopes to become world-class, residents often find it difficult to get uninterrupted supply of even the most basic amenities.

… And a turn of luck

Since not much improvement is seen on those two fronts listed above, would it even be correct to assume a change is likely for Gurgaon real estate in the New Year? Well, we have reasons to believe they would.

Private estimates show Gurgaon saw the most rigorous commercial space leasing activity in the second quarter. Global technology giants are betting on Gurgaon’s top-quality office spaces to make their mark in one of the world’s largest markets. As the rule goes, people follow jobs. If they do so, the only likely scenario is that they would move to Gurgaon in search of rented or permanent accommodations. If that happens, they would find it easy to have their pick as the city property market is replete with 47,500 fresh units that were added to the city’s existing housing stock in the last three months of 2018.

Possible completion of some stuck infrastructure projects that are slowing down the process of recovery for Gurgaon real estate may also help turn its luck.  

The Kherki Daula toll plaza, for instance, is acting as a spoil sport for Manesar, Dharuheda and Bhiwadi markets. The toll plaza is major of traffic congestion in the areas. While plans to shift it to another location have been in the making since 2017, the government is may finally move the site this year. The shifting of the toll plaza would make the Delhi-Manesar industrial area stretch toll-free, giving a major boost to property markets nearby.

The completion of the Southern Peripheral Road (SPR), which will connect the Golf Course Road with the National Highway-8, would also act as a panacea for the micro property markets of the Golf Course Road and the Sohna Road. The 16-km-long road originates from the Gurgaon-Faridabad Road near Ghata Kanarpur and meets the NH-8 near Kherki Dhaula via an intersection at the Sohna Road, at the Badshahpur Chowk.

The much-delayed Dwarka Expressway, which will provide greater between Delhi and Gurgaon, is also impeding the growth of the property market. Work on the Haryana stretch of the project is likely to start this November. Even if a full recovery may not be on the cards, Gurgaon may very well regain some of its lost charm for property seekers and investors.